Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Economics 2e

Key Terms

Principles of Economics 2eKey Terms
aggregate production function
the process whereby an economy as a whole turns economic inputs such as human capital, physical capital, and technology into output measured as GDP per capita
capital deepening
an increase by society in the average level of physical and/or human capital per person
compound growth rate
the rate of growth when multiplied by a base that includes past GDP growth
contractual rights
the rights of individuals to enter into agreements with others regarding the use of their property providing recourse through the legal system in the event of noncompliance
convergence
pattern in which economies with low per capita incomes grow faster than economies with high per capita incomes
human capital
the accumulated skills and education of workers
Industrial Revolution
the widespread use of power-driven machinery and the economic and social changes that occurred in the first half of the 1800s
infrastructure
a component of physical capital such as roads and rail systems
innovation
putting advances in knowledge to use in a new product or service
invention
advances in knowledge
labor productivity
the value of what is produced per worker, or per hour worked (sometimes called worker productivity)
modern economic growth
the period of rapid economic growth from 1870 onward
physical capital
the plant and equipment that firms use in production; this includes infrastructure
production function
the process whereby a firm turns economic inputs like labor, machinery, and raw materials into outputs like goods and services that consumers use
rule of law
the process of enacting laws that protect individual and entity rights to use their property as they see fit. Laws must be clear, public, fair, and enforced, and applicable to all members of society
special economic zone (SEZ)
area of a country, usually with access to a port where, among other benefits, the government does not tax trade
technological change
a combination of invention—advances in knowledge—and innovation
technology
all the ways in which existing inputs produce more or higher quality, as well as different and altogether new products
PreviousNext
Order a print copy
Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at https://openstax.org/books/principles-economics-2e/pages/1-introduction
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at https://openstax.org/books/principles-economics-2e/pages/1-introduction
Citation information

© Jun 15, 2022 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.